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Speculation mounts over Lucent and Ascend

Acquisition set to rival Cisco

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Lucent Technologies, the telecommunications equipment maker, yesterday moved into the communications software arena amid mounting speculation of a $16 billion merger with Ascend Communications. Lucent has already splashed out $1.48 billion to acquire telephone billing software manufacturer Kenan. But rumours were still rife that a far more consequential deal could be on the cards with US data networking group Ascend. Today’s Financial Times reported the long-rumoured Ascend deal should be announced within days. Valued at around $151.6 billion, Lucent could pay more than $80 a share for stock in Ascend – which has a market value of about $15.5 billion. The partnership would challenge networking giant, and top Lucent rival, Cisco. Buying Ascend would fill the networking gap in Lucent’s product portfolio. It would gain access to Ascend technology, backed up by Lucent’s weighty financial resources and large sales force. Lucent, spun-off from AT&T in 1996, was said to have been working closely with Ascend for months. Industry sources said that Lucent was waiting for its stock to hit the right level before it could offer Ascend a worthwhile deal. ®

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